Initiate long positions. The FCPO ended the latest trade on a positive note, adding MYR71 to close at MYR2,500. Intraday tone was encouraging as the soft commodity generally trended higher for the whole session from a low of MYR2,410. The closing level placed it slightly above the 200-day SMA line, which has invalidated our previous bearish bias for the commodity to develop a retracement phase. Premised on this, we switch our trading bias from negative to positive.

Our previous short positions initiated at MYR2,359 – the closing level of 7 Jul – were closed out at MYR2,450 in the latest session. Concurrently, we initiate long positions at the latest closing level. To manage risks, a stop-loss can be placed below MYR2,465.

We revise the immediate support to MYR2,480 followed by MYR2,465 – both are derived from the latest candle. Moving up, the immediate resistance is now eyed at MYR2,550, followed by MYR2,586 – which was the high of 5 Mar.

Source: RHB Securities Research - 20 Jul 2020